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Organizational learning is the psychosocial process of change in cognition and behavior occurring within and between organizations. Its importance to the practice of management is perhaps best captured by the view that the capacity of an organization to learn faster than its competitors may be the only sustainable competitive advantage. In addition, as environments become more turbulent, complex, and uncertain, organizations need to develop the capacity to adapt through learning. However, researchers have resisted the temptation to view organizational learning as simply a positive process and one that leads to superior performance. This is in contrast to the learning organization literature, which tends to assume learning is inherently a positive process. The learning organization literature is practitioner based and prescriptive in its orientation. In contrast, organizational learning is research based and more descriptive in orientation.

Conceptual Overview

The many reviews of organizational learning research have revealed several noteworthy aspects of the phenomenon: (a) a multilevel orientation, (b) cognitive and behavioral components, (c) types of learning, (d) the relationship between learning and performance, and (e) applications of organizational learning.

Multilevel Perspective

The multilevel perspective takes into account that organizational learning spans multiple levels—individual, group, organization, interorganization, industry, and society. Early organizational learning research suggested that organizational learning occurs when individuals, acting on behalf of the organization, learn. Essentially, the focus was on individual learning within organizations. The group level emerged as an important level of analysis and has been interpreted in several ways: a collection of individuals; a community (often referred to as a community of practice); or a more formal group such as a business unit, functional unit, or team. In terms of the organization level, researchers acknowledge that learning endures in the organization long after individuals leave, residing in the artifacts of the organization, such as systems, structures, strategies, procedures, and routines. Interorganizational learning has been examined in the context of joint ventures and alliances, and organizational learning theory has more recently been employed to examine learning at the industry and societal level.

Research has shown that individual and group learning exceeds the capacity of the organization to absorb it. Research has also shown that it is important to consider the flow of learning between the levels. Where stocks exceed the flows, performance will suffer. Essentially, when individual and group learning is stockpiled, frustration sets in, and performance suffers.

The multilevel perspective necessitates a psychosocial orientation to the phenomenon: understanding how individuals learn from a psychological perspective and applying a sociological perspective to understand learning arising from and within a community of practice. The 4I learning framework advanced by Crossan, Lane, and White provides a good example of the multilevel perspective. The framework describes how the processes of intuiting, interpreting, integrating, and institutionalizing span the individual, group, and organization levels. It also captures the stocks of learning at the individual, group, and organization levels and the flows of learning between the levels (feedforward and feedback).

Cognition and Behavior

Organizational learning theory draws heavily on both cognitive and behavioral research in psychology. Fiol and Lyles introduced the initial debate about whether organizational learning involves change in cognition or behavior, and subsequent research has embraced the interrelationship between the two. In particular, organizational learning theory developed a stronger sociological orientation as the group-level of analysis gained prominence. The initial individual cognitive psychological view was counterbalanced, and a better appreciation for the relationship between cognition and behavior emerged. This was particularly pronounced in the work of Brown and Duguid, as well as Lave and Wenger with respect to communities of practice. Underpinning research on communities of practice is the view that in the daily practice of their work, individuals learn by doing. For example, research has revealed that rather than relying on procedure manuals for instruction, employees learn from one another in informal settings as they share stories about their experiences.

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